Tuesday morning, the three-member Geauga County Budget Commission rejected the 2019 tax budget for the Russell Township’s probate court-appointed park district, three days before the state’s deadline for local government entities to submit their annual budgets.
Unless the park district — created under Ohio Revised Code Chapter 1545 — comes up with another budget, and the budget commission passes it before the Aug. 31 deadline, the district will be unable to spend all but a tiny fraction of its funds next year, county Treasurer Christopher Hitchcock said Tuesday.
“You submitted a budget, but it had several incorrect or erroneous data points,” county Auditor Charles Walder told district representatives at Tuesday’s budget hearing. “We don’t know your balances, which you have adjusted several times, are irregular, and do not match your math.”
At issue was about $52,000 that apparently disappeared from a restricted levy account and re-appeared in the general fund, according to Walder, who previously served as Russell Township Fiscal Officer before being appointed county auditor in April.
Walder said he met with Park Commissioner Scott Wayt on Aug. 17 to go over the data sheets and identify errors.
Wayt told the budget commission that two days later the park district held a special meeting and voted to hire an accounting firm to straighten out the mess, which he said has been a problem dating back to 2014.
Wayt said the park district agreed to hire the firm for up to 100 hours, at $80 per hour.
“We want to get it corrected,” Wayt assured commission members.
“Our challenge here is we have a hard stop on the first of September,” Walder told him. “What do we do?”
Geauga County Prosecutor Jim Flaiz, the third member of the county panel, said he had never seen a government body fail to submit a correct budget before the state deadline.
“I can’t put my name on this budget, because it’s not correct,” Flaiz said. “I couldn’t find an answer to that. We’re in uncharted waters.”
Hitchcock said, as far as he could tell, the park district has $160,000 in cash, which he said is 259 percent of its annual operating budget.
“You’ve got more dough than you need for the next two-and-a-half years,” Hitchcock told Wayt, who said he disagreed with that statement because the park district needs to maintain its latest acquisition, the former Modroo Farm on Hemlock Road.
“In the past seven to eight years, your average expenditures have been about $30,000 a year,” Hitchcock said.
Flaiz said that income from a recent levy is restricted to land acquisition only, which he called the most restrictive levy language he had ever seen.
“Your voters decided that,” he added.
Chardon attorney Dale Markowitz, representing the park district, said the levy language was “a little broader than that,” including money for environmental improvements, such as new plants.
Flaiz said he was concerned that levy money had somehow found its way into the district’s general fund. He asked former Park Commissioner Charlie Butters, “Did you do that?”
“That was a misconception,” Butters said, explaining the financial confusion began before his tenure.
“You took their budget and saw ‘X’ amount was supposed to be in the general fund, so you took the levy money and put it in the general fund,” Flaiz told Butters. “That money shouldn’t have gone in there because it was restricted.”
Butters — who resigned from the park board in April 2017 after serving less than 14 months — said the Modroo purchase, his mother’s death and other factors all contributed to the financial confusion.
“I had a lot on my plate and our fiscal officer just transferred,” Butters told the panel. “It’s not like we were sitting on our hands. We were very busy. I got (the budget commission) as much data as I could.”
Walder said another issue of major concern was the park district was still not using the state’s Universal Account Numbering system, despite deciding to join the system in March 2016.
“You moved to proceed to the UAN system, but no action,” Walder said.
“That’s when Modroo was exploding,” Butters replied.
Walder said the park district’s budget was relatively small and simple. He couldn’t understand why a small, simple budget had so many errors.
“Your beginning and ending balances fluctuated,” Walder said. “You kept restating your financials.”
Flaiz said a state audit of the park district could not be completed last year because the auditors could not gather enough correct information.
“I don’t know what more I could have done,” Butters said.
“You could have hired an accountant, which you’ve now done,” Walder told Butters.
Butters also admitted he recently found missing financial data on an old laptop.
“I’m dumbfounded,” said Walder. “I don’t understand. You had the data on the shelf all along. That brings up the question about the proper maintenance of records.”
“You understand, there were issues,” Wayt said.
“The issue before this board now, is the status of your previously submitted budget,” Hitchcock said.
“We can’t determine if it’s accurate,” Walder said. “We know that the ending balance is flawed.”
Flaiz moved to reject the Russell Township 1545 Park District’s 2019 budget. The motion passed unanimously.
Markowitz objected to the action.
“By denying the budget, you put the park board in a position that their only option is to appeal to the state (bureau of taxation), which will be costly,” Markowitz said. “In my 43 and a half years here, I’ve never seen a budget not approved.”
Flaiz said he made the motion because he thought Markowitz would file a mandamus action against the budget commission, claiming they did not properly do their duty.
“With all due respect, we’re now in the eleventh hour,” Walder told Markowitz. “This budget commission met with the park district months ago and asked for data, but all we got was crickets. I appreciate your quagmire, but you can’t ask the voters for more money when you don’t know how much you have.”
“They are in this position because of the people in this room, who failed them,” Markowitz said, adding the panel should have guided the park district long ago, when they first knew there were problems.
“We’ve been harping on this for several years,” Flaiz shot back.
“Since 2011, this (1545 park district) has failed their community miserably,” added Hitchcock.
“When the new board went in, they created a giant accounting mess,” Flaiz said. “What was a small accounting problem has snowballed into a big mess.”
